Another Airline Merger

April 27, 2012

I may be dim, but I’m having deja vu all over again after reading that the unions of newly-bankrupt American Airlines would rather consider a merger with habitually-bankrupt US Airways than pursue a draconian business plan proposed by their own management.

If it happens, the new carrier will still slash thousands of workers, erase duplicative routes, and find other ways to save money. There are investment bankers and management consultants who specialize in these sort of match-ups between distressed partners, and the airline industry specializes in providing them with willing victims (many high fixed-costs and vagaries of oil prices and weather make turning a profit about as reliable as winning at blackjack).

The branding of such mergers is also predictable: Management will publish public “letters” full of highfalutin language about A New Beginning for the company and image ads will promote some permutation of We’re Back message (smiling workers interspersed with gleaming planes against bright blue skies). The brand absorbed in the merger (likely US Air) will see its plane tails repainted, perhaps with some logo that combines the two carriers’ symbols and was designed by a pricey branding consultancy.

And then the service hiccups will resonate through the operational systems that don’t link-up perfectly and can’t get fixed fast enough because there aren’t enough people to do it thanks to those staff reductions identified by the management consultants. Airport lines will get longer. Bags will get misplaced. The staff that survives the cuts will have to work harder and longer, probably for no more money and quite possibly for less, and they’ll have to look forward to a future of less job security and lower benefits (if any) if they make it to retirement. And then there’ll be massive thunderstorms and another oil price shock.

So even if the new airline finds ways to minimize these shortcomings in the short term, it will still face them in the longer-term, just as United/Continental and Delta/Northwest do. We know it. The airline industry stinks. It’s funny, but I predict that we won’t see one media type point this out as coverage of the American/US Airways saga unfolds.

If ever there were an opportunity to think about an airline merger differently, however, now is the time to do it.

Instead of using the same old worn-out consultant PowerPoints about synergies and efficiencies, why not imagine new ways to approach an airline brand? What could the new business do better and differently than the old one…from a customer perspective, not in terms of reducing the sheets of toilet paper used by employees or other cost-control measures? How could it address obvious, chronically under-addressed problems with flying — delays, the hell of carry-on stuffing, endless add-on costs, the increasing impossibility of using miles to get an actual seat when you want one — with creative, customer-facing solutions? Might there be ways to use the extended social communities of fliers of both carriers to partner with them in the process now, not later on when it needs them to roll over and accept the fait accompli, and do so in meaningful and binding ways (perhaps literally give them skin in the game in exchange for their support)?

Ultimately, the beautiful image ads and new logo on the airplane tails will matter to nobody except the pricey consultants who’ll get paid for producing them. What’ll matter to fliers is how a new American/US Airways delivered its “product” in tangible, objectively real ways.

The cost-cutting plan isn’t the operational plan any more than hiring image consultants will constitute the branding plan. There’s only a single plan that meshes operations with experiential outcomes. Everything else is incidental.

I say all this with a vested interest: I’m a lifetime uber-level AAdvantage member, and I want the new airline to succeed. So I am publicly offering my help free of charge to American and/or to US Airways. Let’s sit down and I’ll brainstorm with you what the opportunities might be (as there are many), and I bet we’d come up with ideas that are far better than the few I listed in this essay.

If not, I’ll just wait for those beautiful ads and PR announcements and, like most of the other fliers of either airline, I’ll probably start shopping on price.